Capital as stored labor

[JVRLand]

I'm a novice when it comes to the economics of labor, and I find it hard to understand. Could someone explain what is meant by capital being stored labor? Does this mean that capitalists who own capital are contributing labor to a product?

[Blake's Baby]

No, it means that 'capital' only exists because at some point someone has put effort into doing something.

A machine, that can be used to make... widgets, let's say, is the stored labour of all the people who mined and smelted the metal to make the parts for the machine, and the labour of those who put it together.

A bunch of money used to start a business must come from somewhere - let's say, a bank loan; the bank's money is the invested wealth off individuals and companies that have turned surplus labour into cash by selling the products of that labour. Again, this is 'stored labour'.

All wealth in society is the result of people acting to change ('labouring' on) material stuff. The money is not the wealth; the money is just a way of exchanging the value of that wealth. You can't eat money, it's the dinner that is made that embodies the actual wealth - the socially constructed use-value, as a person has taken some things (ingredients) and transformed them through labour (preparation and cooking, on a cooker that is itself capital, ie stored wealth) into something that is consumable.

Does that make slightly more sense? Or am I just getting you confused (and hungry)?

[JVRLand]

That makes sense. So multiple people contribute their labor, and thus value, to a product. Here's my issue. Say I work at a wage for a period of time and eventually accumulate enough money to be able to buy a pizza oven. Then I employ a wage laborer to cook pizzas with it. But he says that he should get all the pizza because he made it. But I'm going--hey, my labor went into making this oven, so you're stealing my labor if you take the pizza. Is that right?

[BAM]

It's more that production should be planned socially, with distribution based on needs, rather than your one-firm scenario. All production is social, that is, it is performed in the context of a huge web/network of social co-operation. So we are talking about an entire class using the means of production simply to create stuff for our own needs, rather than making stuff so that private individuals or firms can make profits.

If you were to employ someone to work for you, presumably this would be for a profit. But that profit only comes from working that person to produce more value in marketable goods than it costs for his wage and your overheads. Thus he would be working a portion of his day for nothing.

As for machines, what you termed capital, but what Marx terms "fixed capital": this transfers its value, the labour "stored" in it, bit by bit into the products it is used to make. Of course, only living labour creates new value. Machines cannot work by themselves.

[Ovi]

Obvious troll.

[Zanthorus]

Er, how is it an obvious troll? He's asking legitimate questions.

[Blake's Baby]

Your labour didn't go into making the oven, your labour made car parts (or whatever) for someone else who paid you 1/10 (or whatever) of the value of the stuff you made for them and then you swapped some of that for an oven made by someone else. You said in your post you bought it.

However, mostly what happens when people start a business is that they get a bank loan. The bank looks at a variety of people and says "these people are most likely to succeed in their business ventures. We will loan these people money". What that means is, most entrepreneurs don't actually add any value themselves to what they're doing, they just convince some people who look after money, that they'll be good at exploiting the labour of others.

There are self-made business people who have, through their good fortune, hard work and careful saving, amassed enough money through wage labour to buy their own means of production but these are very rare compared to the people who merely manage the exploitation of others in return for a loan.

The thing for socialists is that, as all exchanges happen under the rules of capitalism, and capitalism is based on the exploitation of workers, all transactions under capitalism must by definition have been made under duress. So after the revolution, it wouldn't matter if you'd taken out a loan to buy your pizza oven, bought it through 20 years of saving a portion of your wages, or mined and smelted the metal yourself and hammered it into shape before connecting it to a gas-pipe from a biogas plant running from your household waste. The pizza oven would still, as a 'means of production' be collectivised. Your right to it as an 'owner' depends entirely on the laws of capitalism.